Questions and Answers of Macroeconomics Principles

The Bureau of Economic Analysis (BEA) currently treats research and development (R&D) expenses as an intermediate good. That is, R&D expenses are assumed to be already included in other goods
The following table shows an estimate of the destruction caused by the terrorist attacks of September 11:Type of Property…………………………………. Estimated LossWorld Trade
Refer to question 8. The 2,140 Ziponians who searched for work during the previous four weeks included: 54 ski resort employees who lost their winter jobs but expect to get them back in late fall;
a. The country of Ziponia uses the same method to calculate the unemployment rate as the U.S. Bureau of Labor Statistics uses. From the data below, compute Ziponia’s unemployment
Suppose that in one year household consumption falls by $20 billion (compared to the year before), but business firms continue to produce consumer goods at an unchanged rate. If there is no other
Ginny asks, “If I buy a sweater that was produced in Malaysia, why is its purchase price subtracted from GDP?” How should you answer her question?
In December 2005, the BLS estimated there were 7.4 million unemployed, 142.8 million employed, 451,000 discouraged workers, and 4.8 million people (including discouraged workers) who were marginally
Toward the end of this chapter, it was stated that if half of the 8.8 million involuntary part-time workers in August 2011 were counted as unemployed, then the unemployment rate that month would have
The country of Freedonia uses the same method to calculate the unemployment rate as the U.S. Bureau of Labor Statistics uses. From the following data, compute Freedonia’s unemployment
Calculate the total change in a year’s U.S. GDP for each of the following scenarios. (Assume that all production takes place in the U.S., unless otherwise stated.)a. A family sells a home, without
Using the expenditure approach, which of the following would be directly counted as part of U.S. GDP?For those that count, state whether the action causes an increase in C, I, G, or NX. (If you need
Assume that the country of Ziponia produced real GDP equal to $5,000 (in billions) in the year 2000.a. Calculate Ziponia’s output for each year from 2000 to 2006, assuming that it experienced a
Use the information in the table below to calculate the percentage change in real GDP from 2007 to 2008, from 2008 to 2009, and from 2009 to
Suppose that real GDP had grown by 3 percent each year from 2004 to 2007. Using some of the data in problem 3:a. What would real GDP have been in 2007?b. Based on your answer in (a) above, what would
In 2004, real GDP (at 2005 prices) was $12,247 billion. In 2007, it was $13,206 billion. During the same period, the U.S. population rose from 292.9 million to 301.4 million.a. What was the total
Over the past 90 years, the U.S., unlike some other countries, has not experienced ‘double digit’ inflation.” Is this statement true or false? Explain briefly.
“In 2010, in the aftermath of our most recent recession, the yearly average U.S. unemployment rate rose to its highest level in over 90 years.” Is this statement true or false? Explain briefly.
Every year, the housing market in Monotone, Arizona, has the same experience: The demand curve for housing shifts rightward by 500 homes, 500 new homes are built, and the price of the average home
Suppose you buy a home for $200,000, making a $40,000 down payment and taking out a mortgage for the rest. The annual interest rate on your mortgage is 5%, which is also the interest rate you can
Suppose you buy a home for $200,000, using your own funds funds. The annual interest rate you could earn by investing your funds elsewhere is 5%. (Ignore any sales commissions or fees associated with
In a study session, one of your fellow students says, “I think our econ text book has a mistake: It shows the supply curve for housing as a vertical line, which implies that a rise in price causes
In early 2011, even though cotton prices were high, cotton farmers in China began to hoard (rather than sell) most of the crop they had harvested, filling spare rooms and even living areas of their
The table at the end of this problem gives hypothetical data for the quantity of electric scooters demanded and supplied per month.a. Graph the demand and supply curves.b. Find the equilibrium price
How would each of the following affect the market for denim jeans in the United States? Illustrate each answer with a supply-and-demand diagram.a. The price of denim cloth increases.b. An economic
Consider the following passage from an article in the New York Times on March 9, 2011, “In the last few years, coffee yields have plummeted here [Colombia] and in many of Latin America’s other
Evaluate the following statement: €œIf the dollar values in the following table are accurate, it follows that providing meningococcal vaccines to all adolescents would be cheaper than
Suppose that you are considering what to do on an upcoming weekend. Here are your options, from least to most preferred:(1) Study for upcoming midterms; (2) Fly to Colorado for a quick ski

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